Retirement topics - Reemployment after military service or maternity/paternity leave

If an employee returns to work at the same place of employment after military service or a maternity or paternity leave of absence, the employee is generally entitled to vesting credit for the period of absence and certain other rules apply.

Military service

If an employee is reemployed after military service, the plan must:

• grant vesting and benefit credit for the period of absence;
• credit the participant with any allocations of employer contributions to which the participant would have been entitled if not for the absence (except for earnings and forfeitures);
• allow the make-up of employee contributions or deferrals after the return to work;
• provide for a suspension of loan repayments until military leave is completed; and
• generally limit plan loan interest to 6%.

Maternity or paternity leave

For vesting and eligibility purposes, an employee who is absent from work due to pregnancy or the birth or adoption of a child is treated as having completed the number of hours that would have been credited but for the absence, up to 501 hours of service. The credit for hours of service during the absence is only for determining if a break in service has occurred. See IRC Section 411(a)(6)(E).